MPs to lobby Matambo against tax hikes
Pauline Dikuelo | Friday February 10, 2017 18:00
In his Budget Speech on Monday, Matambo revealed that government was considering proposals from the Taxation Review Committee on adjusting various taxes, levies, permits and licensing as well as reviewing some tax expenditures such as value added tax (VAT) exemptions.
He said the proposals were part of “diversifying sources of revenue,” away from a reliance on revenues from minerals, especially diamonds and customs and excise.
The minister said with the revenues declining and those of Southern African Customs Union (SACU) being volatile, there is therefore an urgent need to diversify the government’s revenue base towards more sustainable and reliable sources.
On Tuesday evening, specially elected Member of Parliament, Bogolo Kenewendo disapproved of the proposals, saying a lobby was underway to persuade Matambo to defer his plans.
“I believe we will be able to lobby the finance minister to delay the adjustment of taxes at least to the end of the ESP because you cannot have an expansionary fiscal policy, running with a contractionary one at the same time,” she said.
“If you are trying to better the economy, you must have household incomes stronger, because these contribute greatly to final consumption GDP. “I would rather say, leave the money with the consumers, than saying government will stimulate via increases in tax. “I’m hoping we will be able to lobby the minister to defer the tax adjustments.”
Yesterday, the Botswana Exporters and Manufacturers Association (BEMA) expressed concern about the planned adjustments, while stressing the sector’s willingness to take up the challenge to create jobs.
“We are sceptical of the interpretation of paragraph 28, especially the last two sentences where the government is ‘considering the proposals by the Tax Review Committee of how to diversify the government revenue base,’” BEMA president, Nkosi Mwaba said in a statement. “We hope, as it is our sincere expectations, that government will engage the private sector in ‘considering’ these proposals to guard against hampering the spirit of ‘private sector led growth’ and of course reversing the gains already realised thus far.”
Besides the impending tax adjustments, Matambo intends to file a raft of adjustments to the Income Tax Act to introduce transfer pricing rules to curb tax avoidance as well as underscore the alignment of this country’s tax system to international best practice.
The amendments will also penalise non-filing of tax returns even when no tax is payable.